Thousands of Universal Credit claimants could miss out on getting the £301 cost of living payment because they broke DWP rules.
Under the current DWP rules, households will not be eligible for the first instalment of the £900 cost of living payment if they have a "nil award" during the qualifying period.
The qualifying period for the first payment is between January 26 and February 25.
A nil award is where your Universal Credit amount is reduced to zero and you can be given a nil award for several reasons.
One of those reasons is due to being sanctioned which can happen if you break the conditions of your Universal Credit agreement.
Being sanctioned reduces your Universal Credit payments for a set period.
The DWP was recently asked by the Labour MP for Lewisham, Deptford Vicky Foxcroft to estimate the number of people who received a nil award during the qualifying period for the first £301 payment.
In a written reply, Mims Davies, parliamentary under secretary of state at the DWP insinuated that the figure could be in the thousands.
She shared that 7,000 people were denied the previous cost of living payment last year after receiving a nill award due to sanctions.
She said: "People are only sanctioned if they fail, without good reason, to meet the conditions they agreed to.
"97.6% of sanctions in the quarter to October 2022 were applied for failing to attend a mandatory appointment at a Jobcentre.
"These sanctions can often be resolved quickly by claimants getting in touch and attending their next appointment.
"If someone with no Universal Credit award due to a sanction re-engages with us they may get one of the later cost of living payments."
The under secretary added that as the Government is delivering three cost of living payments this year, it reduces the chance of someone "missing out altogether" due to nil awards.
If you are sanctioned, then you could lose from 20% to 100% of your standard allowance for Universal Credit
If you are a single claimant, you can face a 100% cut in your allowance, while if you're in a couple you can get a maximum of 50% knocked off.
These amounts reduce to 40% and 20% respectively if you have childcare responsibilities, are pregnant, or are in the midst of an adoption.
Additional elements on top of the standard allowance are not affected by sanctions and are paid as normal.
According to welfare charity Turn2Us, if you are single and over 25, the sanction is £11 per day for as long as it is imposed.
If you are single and under 25, £8.70 per day can be taken off as a penalty.
If you are in a couple and one or both of you is over 25, the sanction is £8.60 per day and if you are in a couple and are both under 25, the DWP will cut £6.80 per day from your allowance.
